Cutting Edge: It All Adds Up

A $3.00 fee here; a $25.00 charge there. You’ve probably noticed—with growing alarm—how small banking fees can chip away at your hard-earned money. To most consumers, banking fees make no sense, yet the totals are astounding. Bankrate.com, which tracks data on a variety of financial products, estimates that Americans spent $4.4 billion in ATM fees in 2007. Though some fees seem unavoidable, here are a few proactive ways to protect your pocketbook.

Negotiate interest rates. Call up your credit card company and ask for a lower interest rate. If the issuer is faced with losing a reliable customer, it may knock off a few percentage points.

Attack high interest cards. Pay down those killer revolving balances ASAP. Or, consider transferring the balance to a card with a 0% introductory rate. Be careful to avoid cards that charge a balance transfer fee. Also, commit to paying off the balance before the introductory rate expires. Check out CreditCards.com for the best deals.

Ditch cards with annual fees. Is any credit card so prestigious to make you want to pay a hefty annual fee, when there are so many no-fee alternatives out there? Instead, open a no-fee account. Don’t rush to close old accounts though, or your credit score may go down. Log on to myFico.com for more information.

Use your own bank’s ATMs. The average fee for using an ATM outside of your own bank’s network is more than $1.50—and some banks charge twice that. Multiply that over a year of withdrawals.

Ask for fees to be waived. Call the customer-service manager and ask if fees associated with your accounts—a new Roth IRA or a savings account with a low balance, for example—can be canceled.

Avoid overdrafts. Stay on top of your account balances; every time you’re overdrawn you’re likely to get hit with a $25 or even $35 surcharge.

Shop around for savings. Not all savings accounts are alike. Check out Bankrate.com to comparison shop. With an ING Direct Orange Savings Account, for example, your money can earn an annual percentage yield of 3%.

Need to cut costs? Come back to blackenterprise.com every Wednesday for tips from The Cutting Edge.